Testing software SOASTA raises $12 million

The Entrepreneur's Fund, Canaan Partners and others back provider of Web, mobile testing tools

Financial trends and news by Bambi Francisco Roizen
December 12, 2011
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With the speed at which products get released online, it's tempting to not test services or products before they go to production. But most companies don't take the chance of having their service fail without ensuring that it works as it scales. After all, who wants their site to collapse under stress? 

SOASTA, a provider of mobile and Web testing tools as a service, announced Monday morning that it's raised $12 million in new funding to help companies ensure a fail-safe environment for a massive onslaught of users. The round was led by The Entrepreneur's Fund. Earlier investors Canaan Partners, Formative Ventures, and Pelion Venture Partners, participated as well. 

SOASTA, which has already raised some $20 million in funding and launched its first testing product in 2008, plans to use the new capital to accelerate the company's international expansion. 

The new funding comes at a time the company has reached some milestones. This year, SOASTA reached 3,000 clients, including large companies such as Netflix, Hallmark and Cisco. This compares to 300 last year. At the moment, about 50% of the customers use the platform on a SaaS (software as a service) basis, said Tom Lounibos, SOASTA CEO and co-founder, in an interview. The hourly rate can be as low as $200 to as high as $1000 per hour. A typical customer using the SaaS model is paying about $10,000 to $15,000 a year, he said. The other 50% of customers buy a SOASTA appiiance and pay anywhere from $15,000 a year to $200,000 in annual subscriptions. Lounibous would not disclose the median amount that the company's appliance customers are paying.

Investing in testing platforms or services appears to be pretty active these days. Recently, uTest, a provider of engineers who can test products and services, raised $17 million in new capital from QuestMark Partners. Last week, Israeli-based BlazeMeter raised $1.2 million from YL Ventures.

The opportunity for a leader in the testing platform market can also be quite big, said Lounibos, pointing to a couple mega acquisitions in the past. Mercury Inteactive, a leading testing software company, was sold to HP for $4.5 billion in 2006.  Back in 2003, IBM purchased Rationale for $2.1 billion.


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